Correlation Between BE Semiconductor and Grand Canyon
Can any of the company-specific risk be diversified away by investing in both BE Semiconductor and Grand Canyon at the same time? Although using a correlation coefficient on its own may not help to predict future stock returns, this module helps to understand the diversifiable risk of combining BE Semiconductor and Grand Canyon into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between BE Semiconductor Industries and Grand Canyon Education, you can compare the effects of market volatilities on BE Semiconductor and Grand Canyon and check how they will diversify away market risk if combined in the same portfolio for a given time horizon. You can also utilize pair trading strategies of matching a long position in BE Semiconductor with a short position of Grand Canyon. Check out your portfolio center. Please also check ongoing floating volatility patterns of BE Semiconductor and Grand Canyon.
Diversification Opportunities for BE Semiconductor and Grand Canyon
0.64 | Correlation Coefficient |
Poor diversification
The 3 months correlation between BSI and Grand is 0.64. Overlapping area represents the amount of risk that can be diversified away by holding BE Semiconductor Industries and Grand Canyon Education in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Grand Canyon Education and BE Semiconductor is a relative statistical measure of the degree to which these equity instruments tend to move together. The correlation coefficient measures the extent to which returns on BE Semiconductor Industries are associated (or correlated) with Grand Canyon. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Grand Canyon Education has no effect on the direction of BE Semiconductor i.e., BE Semiconductor and Grand Canyon go up and down completely randomly.
Pair Corralation between BE Semiconductor and Grand Canyon
Assuming the 90 days trading horizon BE Semiconductor Industries is expected to generate 2.18 times more return on investment than Grand Canyon. However, BE Semiconductor is 2.18 times more volatile than Grand Canyon Education. It trades about 0.33 of its potential returns per unit of risk. Grand Canyon Education is currently generating about -0.14 per unit of risk. If you would invest 12,515 in BE Semiconductor Industries on October 11, 2024 and sell it today you would earn a total of 2,015 from holding BE Semiconductor Industries or generate 16.1% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
BE Semiconductor Industries vs. Grand Canyon Education
Performance |
| Timeline |
| BE Semiconductor Ind |
| Grand Canyon Education |
BE Semiconductor and Grand Canyon Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with BE Semiconductor and Grand Canyon
The main advantage of trading using opposite BE Semiconductor and Grand Canyon positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if BE Semiconductor position performs unexpectedly, Grand Canyon can make up some of the losses. Pair trading also minimizes risk from directional movements in the market. For example, if an entire industry or sector drops because of unexpected headlines, the short position in Grand Canyon will offset losses from the drop in Grand Canyon's long position.| BE Semiconductor vs. DONGJIANG ENVIRONMENTAL H | BE Semiconductor vs. Carnegie Clean Energy | BE Semiconductor vs. Firan Technology Group | BE Semiconductor vs. Tianjin Capital Environmental |
| Grand Canyon vs. Hitachi Construction Machinery | Grand Canyon vs. NORTHEAST UTILITIES | Grand Canyon vs. BE Semiconductor Industries | Grand Canyon vs. AGRICULTBK HADR25 YC |
Check out your portfolio center.Note that this page's information should be used as a complementary analysis to find the right mix of equity instruments to add to your existing portfolios or create a brand new portfolio. You can also try the CEOs Directory module to screen CEOs from public companies around the world.
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